Last week saw the launch of Monnow Valley CHP, the first project of its kind on Abundance.

It is brought to you by the same team behind Monnow Valley Biomass and now, as with then, we thought you might like a quick explainer of Combined Heat & Power (CHP) to get an idea of how the project works.

What is CHP?

CHP has become increasingly popular in the past few years as developers and business owners have realised it is an efficient, consistent source of electricity and heat.

Each Biomass-fuelled CHP unit in Monnow Valley CHP is made up of a gasifier, a gas engine, a generator, and a heat exchange system. How it works is that wood chips are heated to a very high temperature – usually around 1,000C – and converted from a solid state to gas.

This gas is ignited and drives the engine, which produces electricity.

In the process of producing that electricity a lot of heat is generated. In conventional power plants this heat tends to be lost. If you have ever seen a conventional coal or gas fired power plant, the steam you see rising from cooling towers is heat that is simply lost.

In the case of Monnow Valley CHP, that heat is put to additional use by drying wood chips. The heat is sold to a company called B&B Biofuels (also run by the Monnow Valley team), who sell the dried wood chips back to Monnow Valley CHP and other local biomass users.

To put the energy efficiency improvement of using CHP compared to conventional fossil fuel generation into context: CHP typically runs at around 80% efficiency, meaning that a minimal amount of energy generated is lost as waste. In a conventional power plant efficiency can be as low as 38%, but for gas is typically around 50%. That’s a huge amount of energy being generated in the form of heat that is just disappearing into the atmosphere.

A lot of the ‘smoke’ you see coming from conventional power plants is actually steam from heat lost in the power generation process.

Why do people choose it?

There are three main reasons people choose to install CHP:

  1. It is a more efficient – and thus environmentally friendly – way to provide power for high electricity and heat users
  2. It can provide more consistent electricity prices for tenants
  3. Government subsidies make it a viable investment over the long term

In the case of Monnow Valley CHP the number of units being installed has been carefully calculated based on the electricity demand of tenants at the neighbouring business park. This ensures that the system of units is large enough to supply all of or close enough of the electricity needs of Sigeric Business Park and its tenants, as well as supplying enough heat for B&B Biofules to dry sufficient wood chip for this project and several other local biomass users.

The woodchip in Monnow Valley CHP will be sourced locally wherever possible.

What about the wood chip?

Wood chip is a more sustainable source of fuel than conventional coal and gas. It can be grown relatively quickly, meaning it is easily replaced, and it takes as much carbon dioxide from the air when it is grown as it releases upon being burnt, making it almost carbon neutral.

The wood chip in Monnow Valley CHP will meet the sustainability criteria required to quality for the Renewable Heat Incentive. Plus, wherever possible the wood chip will be only from local suppliers and those that meet a European specification standard ensuring certain quality, dimensions and water content. These standards ensure that some of the best wood chip is used, which in turn helps to maintain the long term performance of the CHP and biomass units.

On the subject of local supply, Monnow Valley CHP intends to be a role model. Sourcing wood chips from local suppliers, drying it in the same area and then selling it back to biomass boiler users ensures that transport costs and emissions are kept to a minimum.

Monnow Valley CHP

Our projects team has worked long and hard to bring Monnow Valley CHP to the Abundance platform. Having now been open for investment for less than a week it has already attracted more than £1.5 million of investment.

Find out more on the project page of the website.

Risk warning

Part or all of your original capital may be at risk and any return on your loan or investment depends on the success of the project. Investments tend to be long term and may not be readily realisable. Estimated rates of return are variable and estimates are no guarantee of actual return. Consider all risks before investing.

Karina Sidenius

Karina Sidenius

Karina is part of the Marketing team, having joined Abundance almost straight out of Uni. She writes regularly on personal finance, investing, and Abundance projects.